Morning 7-2

News:

  • More tariffs  yeah  The U.S. is adding more E.U. goods to a list of products threatened with retaliatory tariffs in the long running subsidy dispute with Airbus-BBG
  • The gold ETF , GLD has seen 14 consecutive days of Inflows
  • Opec has agreed to continue production cuts for 9 more months
  • IMF chief Christine lagarde  the new frontrunner to replace Draghi as  ECB head  Another Dove taking control
  • Italy has agreed to produce a budget within EU guidelines, this goes against all Campaign promises by the current Government.
  • Australia Central bank Cut rates by .25% to 1% and signaled more cuts to come (Reuters)

From FIR News:

With the race to the bottom in global yields (and monetary policies), the other side is seeing a record influx of investor funds into fixed income markets. Indeed, year-to-date a record amount of inflows were seen into bond ETF’s with June the strongest of these months. These mainly passive managed funds have just passed the $1 trillion market with Blackrock suggesting “huge growth” and perhaps a doubling of these ETF’s in less than five years’ time. With the ECB (and perhaps others) set to resume the large scale buying of bonds where will the supply come from? Modern Monetary Theory (MMT) perhaps.

In the meanwhile, it will likely be a constant scramble for the global bond markets to find opportunities to buy paper. Equities (and other assets) as well, are expected to defy gravity and be more prone to inflate than not as the global savings glut and central bank largesse keeps the notion of TINA (there is no alternatives) alive and well.

 Markets s Just Blah today Stocks down a bit, Bunds little changed, Gilts higher due to ugly Construction Data from U.K. BTPs higher on Italy comments regarding budget. Gold higher but Copper heavy again. Copper had biggest drop in about 2 weeks yesterday on contract high Volume, More pessimism regarding economy maybe. Dollar sideways as it hover above the 200 D MA. Grains a small bid as Crop Conditions for both corn and Soy missed expectations

Very light Economic calendar today, Fed speak shows Mester, Nonvoter and Hawk at 10:00

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